Tesla To Buy Solar City In Deal Valued At Nearly $3 Billion

Tesla MotorsTSLA -1.30% is offering to buy SolarCity in an all-stock deal valued at $2.5 billion to $3 billion, which would combine entrepreneur Elon Musk’s visions for sustainable energy and electric cars in one company.

Musk owns a 21.3% stake in Tesla and a 22.2% stake in SolarCity, according to FactSet data. He is chief executive of Tesla, which makes electric cars and lithium-ion batteries, including some that are used to power homes with solar power offered by Solar City. He is chairman of SolarCity, which was founded and run by his cousin, Chief Executive Lyndon Rive.

If completed, Tesla said in a blog post it would become the world’s only vertically integrated energy company offering end-to-end clean energy products to its customers. “This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered.” Customers would efficiently power their homes and their cars with sustainable solar energy, lowering their costs and minimizing their dependence on fossil fuels and the grid, Tesla said.

Tesla said the deal would expand markets for both companies, noting that Tesla buyers and Powerwall users are interested in solar energy, and solar customers share an interest in electric cars and home energy storage. “When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit.”